The European Union and India

The European Union and India

Rhetoric or Meaningful Partnership?

Pascaline Winand, Marika Vicziany and Poonam Datar

This multi-disciplinary book provides a comprehensive analysis of the EU–India relationship from 1950 to the present day, as a way of assessing whether a meaningful and sustainable relationship is emerging and whether it will play a role in the future of international diplomacy and business.

Chapter 8: It takes two to tango: industry and foreign direct investment

Marika Vicziany

Subjects: asian studies, asian politics and policy, politics and public policy, european politics and policy, international relations


‘What if the world’s largest market and the world’s second largest emerging economy deepen their trade relationship – and Washington sleeps through it?’ (Stokes 2008, p. 50). This scenario is certainly very exciting provided you are not an American. Anxieties in the US about the possible free-trade agreement (FTA) between the EU and India have not abated despite the persistent financial/economic crisis in Europe. It is this more optimistic scenario about European Union (EU)–India economic cooperation that is the subject of the present chapter, in contrast to the previous chapter that dealt more with the incompatibility of economic interest between the EU and India. In this chapter we consider areas in which mutual benefits of an enhanced relationship might be found. As already noted, EU–India trade is largely about the exchange of non-agricultural goods. Does this mean that any enhanced collaboration in future might lie in the same direction? Beyond trade, we will also consider the way in which exchanges through services might deliver benefits to both partners in this economic dance. Finally, foreign direct investment (hereafter FDI) may be another way of matching the higher technical capacities of Europe with the relatively lower but cheaper technical competencies of India. Such collaborations might have the potential to deliver benefits to both the EU and India in third markets.

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